The Different Types of Insurance in the UK

In the United Kingdom, there seems to be a form of insurance for almost everything, so it can be hard to know which insurances you’re legally obliged to obtain, what each insurance provides, and if you need the cover. So, we’ll be breaking down the many forms of insurance available to the citizens of the UK, making it quick and easy for you to see if you need it or not.

If you’re not entirely sure about getting insurance or what having insurance entails, be sure to check out our How Insurance Works article for a full breakdown.

Health insurance (private)

In the UK, citizens get free medical treatment thanks to the National Health Service (NHS), so getting health insurance isn’t a necessity in most cases. However, certain benefits come with getting private health insurance which will appeal to some.

Private health or medical insurance often will not cover conditions that are pre-existing before the purchase of the insurance, and often won’t cover cosmetic procedures such as plastic surgery. Also often not covered are the likes of mental health problems, diabetes, other conditions termed chronic illnesses, routine check-ups, or pregnancies. What private health insurance will often cover, however, is the cost of your medical bills, in part or in whole in some instances, as well as the majority of in-patient and sometimes out-patient treatments, which include medical tests, surgeries, consultations, and the cost of seeing specialists.

With the NHS, the most likely desire to seek private health insurance would be down to your personal preference of hospital or a desire to have your waiting time shortened. Some people prefer to use private clinics and private hospitals rather than public ones, and sometimes using insurance can speed up the time that can come with waiting for treatment from the NHS. It is also possible that private insurance can grant you access to treatments, programmes, and surgeries which otherwise wouldn’t be available with the NHS.

Dental insurance (private)

While the NHS does cover much of the cost of dental care in the UK, it is one of the few services where citizens are requested to contribute to its cost in the form of a standardised payment.

Costs range from £21.60 for Band 1 procedures, which includes check-ups, examinations, advice, clinically required polishing, fissure sealant, and x-rays if necessary, all the way to £256.50 Band 3 treatments, which are all laboratory works such as bridges, dentures, and crowns. Cosmetic work like teeth whitening will always be an entirely private cost as it isn’t clinically necessary.

Dental insurance covers the cost of all Band 1 treatments, procedures, and check-ups as well as emergency dental work or dental work needed following an accident. It will rarely cover cosmetic treatment. It can be useful to have dental insurance if a lot of treatment is needed, especially if those treatments venture into the Band 3 region, but you usually need to have the insurance for up to three months before you make a claim.

Motor insurance

In the UK, you are legally required to have car insurance if you drive a car or other vehicle on the road. The absolute minimum cover that you need to appease the law is third party insurance, but you can get insurance with more cover if you so choose.

Third party insurance, the minimum required by law, protects other people involved in an accident which involves you, including your passengers and damage to the property of others. However, this insurance does not include the theft of your car or damage done to your car.

Third party, fire, and theft insurance covers everything that third party insurance does, but also includes any repairs or the potential replacement of your car should it be set on fire or stolen. Comprehensive vehicle insurance offers, as it suggests, a greater blanket of cover, which includes everything under third party, fire, and theft insurance as well as any damage done to your car.

Driving without the minimum insurance will result in you being given six penalty points on your licence and paying a fixed fine of £300. If the case goes to court, you could also be given an unlimited fine and be disqualified from driving, with the police also having the power to seize or destroy the vehicle driven by an uninsured driver.

Life insurance

There are many different forms of insurance when considering getting cover in the instance of death, serious illness, or disability. In some instances, your employment agreement will include this form of cover to a certain extent, so it’s a good idea to check with your employer before seeing what life insurance you may need.

Life insurance will pay those who are dependant on your income a lump sum or regular payments, per your life insurance agreement, if you die. It will help a spouse, partner, or children to cover living expenses and the cost of mortgage payments. But, life insurance will only provide cover for death, not disabilities or illnesses that result in you being unable to work.

Critical illness insurance will pay out a lump sum if you become permanently disabled, get diagnosed with a serious illness, or suffer from a serious condition such as certain types of cancer, multiple sclerosis, or if you have a heart attack or stroke. If people depend on your income, having cover for serious illnesses which would put a halt to that income can be very important as it will cover living expenses and mortgage payments.

Income protection insurance allows you to claim whenever illness or disability stop you from being able to earn your pay. It’s a cover that self-employed people and those without sick pay often use in case of illness, with the insurance covering living expenses and bills until you can return to work.

You can also get mortgage protection insurance and payment protection insurance which will cover your credit card repayments, loan repayments, and mortgage repayments should you become unable to work the job which you held at the time of applying for the insurance due to illness, disability, as a result of an accident, or being made unemployed. But, particularly with payment protection insurance, it’s important to be clear on the policy that you’re paying for and that if there is a problem, it can help you. The miss-selling of this insurance recently has led to people needing to apply to their providers to get their money back in instances where their insurance has been without use to them should they have needed to make a claim.

Travel insurance

If you’d like some protection from a loss of items or the possible costs of medical emergencies when you’re travelling abroad, it’d be wise to take out travel insurance. It’ll usually cover emergency medical procedures, costs incurred by your trip needing to be postponed, cut short, or cancelled, the loss or theft of your items, and personal liability. Most travel insurances offer a large amount of cover on the medical side, but be sure to check how much value is covered for the loss or theft of items.

Home insurance

There are two forms of home insurance, one of which is a legal requirement if you own a home. By law, you must have buildings insurance as a homeowner, which will cover the cost of repairing the house in the event of damage caused by subsidence, lightning, fire, and floods but not the general wear and tear of your home. Contents insurance is optional, and while it will provide cover for the damage or theft of your items, general wear and tear isn’t included.

Pet insurance

Due to the high cost of veterinary medical bills, it’s wise to have pet insurance if the species of your pet is known to suffer from a form of chronic illness at some point in its life, or if you suspect them of being likely to pick up an injury. Pet insurance will cover the cost of treatment for your pet, potentially making the insurance very cost-effective, but it doesn’t include the cost of neutering, annual jabs, or spraying.

Business insurance

Most business insurance providers offer a customisable policy which will directly apply to the needs of your business. For example, you can get employers’ liability insurance to have cover for a work-related injury suffered by an employee, or you can get contents insurance if you have stock that you’d like to protect against damage or theft. There’s also the public liability and professional indemnity insurances which can protect your business against claims made by customers for damage or accidental injury, and the cost of defence and compensation should a client think that you’ve made a mistake which has resulted in their grievance.

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